S&P Global warns hidden AI debt could grow for major hyperscalers

S&P Global believes the world’s biggest tech firms are likely to have higher AI-linked liabilities than currently visible, though the agency does not plan to change any credit ratings at this time. Debt issued by AI infrastructure players and neocloud firms such as CoreWeave, backed by Nvidia, has risen to stressed levels amid concerns over aggressive borrowing. Mark Habib, S&P’s global head for digital infrastructure, highlighted the risk of interconnected financing structures where hyperscalers effectively guarantee large data-centre builds or smaller AI companies, creating hidden exposure.

He warned that if expected AI profits do not materialise, ratings could be pressured. The agency projects that Amazon, Microsoft, Alphabet, Oracle, Meta and SpaceX will spend more than $7 trillion on data-centres and AI capex between 2025 and 2030, with negative free cash flow expected at least until next year. S&P is attempting a holistic view but has not quantified the extra debt from these circular financing arrangements.